Arun Shourie, a noted Journalist, Activist, Scholar and Columnist is the author of several books, several of them on a diverse range of subjects related to his journalistic interests, including corruption and brilliant exposé of the Indian Communist party's long-standing anti-national policies.

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Thursday, September 1, 2011

“The secret to writing 26 books is to be unemployed from time to
time,” quipped Arun Shourie, author, journalist, scholar and politician,
releasing Does He Know a Mother’s Heart? - his 26th book.

“I am not a creative writer. I am lawyer, and all my books are
arguments for the prosecution, whether it is on Ambedkar or on
suffering.” That was a comment well in character with the man who is
known for persuasive arguments while remaining as much self-effacing as
an active public life allows.

Does He Know a Mother’s Heart?
critically examines the explanations for human suffering in various
religious scriptures, and in the teachings of prominent spiritual
masters.

Shourie is no stranger to pain. His wife Anita suffers
from Parkinson’s syndrome. And their son, “Aditya, our life, is 35 now.
He cannot walk or stand. He can see only from the left side of his eyes.
He cannot use his right arm or hand. He speaks syllable by syllable.
Yet he laughs,” Shourie writes.

This book comes from what his
wife and he learnt over 35 years. “All religions explain suffering. But
they do not stand up to strict examinations. The theory of Karma always
ends up blaming the victim,” he said.

His long quest for answers
has taken him to the teachings of Buddha. “There is no use looking for
explanations to suffering. Instead, attend to the problem at hand, to
the cause, as if you are attending to a man whose hair is on fire,
Buddha says,” Shourie said.

Despite the personal nature of this
book, Shourie spoke with much humour, citing experiences and even
cracking jokes—a few courtesy Anna Hazare. When asked how he managed his
active public life with a stressful private life, he said: “The secret
is to have a wife who will let you do other things while she takes care
of the real issues.”

On a more serious note, he said, partially
quoting Pandit Nehru: “We simply have to stand up to life. In the face
of fate, we should be shameless and defiant—even fast unto death,” he
said, to laughs from the audience. “There is a reservoir of strength in
all of us and we should tap it.”

Citing an instance from Mahadev
Desai’s diary, where in 1920s Mahatma Gandhi had spoken of feeling so
discouraged with the freedom struggle that he wanted to retire, Shourie
said: “Even the greats felt discouraged at some point, but persevered.
Their words of discouragement should be words of encouragement for us.
Buddha says, ‘Begin and persevere. As a silversmith removes impurities
from silver, so the wise man from himself. One by one, little by
little’.”

Tuesday, July 26, 2011

Former telecom minister A Raja's statements in court has opened a new political battlefront, withBJP demanding the resignation of the Prime Minister and P Chidambaram, who was finance minister when the 2G spectrum allocation was made. The telecom minister during the NDA regime, Arun Shourie , has been tracking developments on the 2G trial. In an interview to ET , Shourie discusses what he believes the PM knew, going by the file notings, Raja's defence that he inherited the policy, and other related issues. Excerpts:

Are you inclined to believe Raja's statements that he did everything with FM's and PM's knowledge?

Raja was very clever. He wrote about 18 letters to the PM during the 2G episode. And in each letter, he implicated somebody. For instance in his letter on 7 November, 2008, he says, "kindly recall my meeting with you on 4/11/2008 along with the honourable Finance Minister in connection with3G spectrum auction and one time spectrum charges for 2G. During the discussion, you advised me to meet the press, to explain the policy and rules.

Accordingly, I addressed the issues in the press conference today and explained the related issues including the dilution of shares as explained by the Finance Minister, of Swan and Unitech." The same day he issues a press release, in which he repeats that this issue has been explained by the Finance Minister. "This matter has been discussed and clarified with the Finance Minister," the press release says, in which this portion is in bold!

Then the FM himself has said, yes, the PM asked me to examine this particular matter. He says I examined it, I said it is dilution of equity and it was consistent with policy and procedure. If that is the case, how is it that now, the Enforcement Directorate, which is under the same ministry, has slapped a 7100 crore penalty on Etisalat? For violation of FEMA!

If everything was done as per policy and procedure, then how? It now transpires, according to ED, that Etisalat was given permission to bring in money from UAE. But it, instead, brought in money from an unknown unit in Mauritius. Secondly, on the same day, Syed Salauddin, a close associate of Mr Karunanidhi, brought in 380 crore. He was allowed to bring it in as a domestic investor and he brought the money from UAE. He has also been slapped with a Fema notice. Both things happened in Swan on the same day.

So, is Raja on firm ground?

All these statements these lawyers like Kapil Sibal are making now, saying everything was in order and there was zero gain to the companies, are statements that will be used by these companies to defend themselves in notices. Kapil Sibal is not the lawyer for the PM, he is the lawyer for Raja and the companies.

It is not Raja who is dragging in the PM now. You go back to Sibal's first press conference on this matter. There he said Raja kept the FM and the PM informed at every turn. I had said at that time that this is the sentence that Raja will use. That is exactly what has happened. Now you wait and see. When the Telecom Minister says the companies made no gain, that will be their defence.

The PM had said in Parliament in February that the then FM and Raja had agreed on a formula and this was communicated to him. Raja says the equity dilution inSwan Telecom and Unitech was discussed and cleared with the FM before the PM. FM says the PM wanted to know if it was a case of dilution of equity or divestment. This shows that the matter that has caused the most outrage, that these two companies benefitted from enormous valuation for a license they paid the government very little for, was known to the PM and he did nothing about the policy that allowed these companies to do this.

All this is in the public domain. Priority lists have been changed, the basis of first-come-first-served had been changed, cut off date had been advanced and 500 applicants were reduced for favoured companies. It now turns out from the CBI chargesheet that the license applications of three companies were approved even before the policy was announced.

You mean to say rivals would not have brought it to the attention of TKA Nair (Principal Secretary to the PM) and others in the PMO? Do you mean to say the Intelligence Bureau and CBI and others would not have brought this to their attention? I cannot believe that. Because our system is so structured that the PM and his office gets to know about every sparrow that moves in the government. That I can testify from personal knowledge.

This was all in public domain...

The notings on the file indicate that the PM was quite alarmed at what was happening. These licenses were given on 10 January, 2008. On 11 January, the Principal Secretary notes that the PM desires to take into account the developments concerning the issue of licenses. This means perhaps that he wanted to have a meeting about it. The file is submitted back to the PMO on 15 January. Now see what the Principal Secretary notes.

"Prime Minister wants this informally shared with the department. He does not want a formal communication and wants PMO to be at arms length". Why would he give this instruction to his officers unless he knew that there is murky stuff going on and it is better to stay away. I think he had full knowledge and I think he had deep apprehension that something terrible has happened and his only concern was let's stay away from the filth. That is not what a PM is supposed to do.

You mean, he knew but shied away from taking any action?

This particular sentence, at arms length, very well describes Dr Manmohan Singh's attitude in regard to CWG, defence acquisitions and every other major decision. Weapons purchases are not happening because Mr Antony (Defence Minister) also wants to stay at arms length on every decision. I think this will be an apt title for a book on Dr Singh's tenure as PM - At Arm's Length.

Raja has also said that if the policy was wrong, all former telecom ministers must be jailed.

Raja says that he was following earlier policies but he flouted them. Take first-come-first-served (FCFS): He says I will FCFS. Then he disregards pending applications. If you were following the policy, you should have dealt with them first. Then he says I will have this cut-off date of October 1. After the applications are received, he says no, I will advance deadline to 25 {+t}{+h} September.

Then he changes FCFS. First, it was time and date of application received. And suddenly it becomes time and date of fulfilling the conditions in the letter of intent. Where is LoI? People rushed for it. It says, within 40 minutes, bring a banker's draft of Rs1,650 crore. Companies he favoured already has those drafts from Mumbai and sitting in his office. How could they get it in 40 minutes?

When he could not find adequate spectrum for his favoured companies, he changes the priority list in the Punjab and Maharashtra circles. You show me one single, unique, solitary instance during my period or anybody else's period during NDA when any of this would have happened. So yes, people who do wrong should be in jail and continue to be in jail without bail.

Thursday, July 21, 2011

Arun Shourie writes about bringing up his son Aditya,
afflicted with cerebral palsy for many years now, in his new book, Does
He know a mother’s heart? (HarperCollins). Adit’s pain and that of the
author’s wife Anita, who suffers from Parkinson’s disease, leads him to
ask: how can there be extreme suffering if God exists? Suffering, he
says, refutes religion. Exclusive excerpts:

Your neighbours have a son. He is now thirty-five years
old. Going by his age you would think of him as a young man, and, on
meeting his mother or father, would ask, almost out of habit, ‘And what
does the young man do?’ That expression, ‘young man’, doesn’t sit well
as he is but a child. He cannot walk. Indeed, he cannot stand. He cannot
use his right arm. He can see only to his left. His hearing is sharp,
as is his memory. But he speaks only syllable by syllable...

The father shouts at him. He curses him: ‘You are the one
who brought misery into our home... We knew no trouble till you came.
Look at you — weak, dependent, drooling, good for nothing...’ Nor does
the father stop at shouting at the child, at pouring abuse at him, at
cursing the child. He beats him. He thrashes him black and blue... As
others in the family try to save the child from the father’s rage, he
leaps at them. Curses them, hits out at them.

What would you think about that damned
father? Wouldn’t you report him to the police or some such authority
that can lock him up? Wouldn’t you try everything you can to remove the
child from the reach of the father?

But what if the father is The Father — the ‘T’ and ‘F’
capital, both words italicised? That is, what if the ‘father’ in
question is ‘God’?

Why does the perspective of so many of us change at once?
Suddenly, they exclaim, ‘There must be some reason God has done this.’
Suddenly, they shift the blame to that poor child: ‘Must have done
something terrible in his previous life to deserve such hardship . . .’

And yet the child loves. He laughs. He is filled with joy
at the littlest things — a tape of Talat Mahmood, lunch at a restaurant,
the visit of an aunt or a cousin... What are we to conclude? That the
cruelties rained upon him by his father have ‘built his character’? That
they have instilled forbearance? Are we to infer, ‘See, while to us the
father seems cruel, in fact he never inflicts more hardship on the son
than the son can bear’?

Were we to say and infer as much, that would be not just
obnoxious, it would be perverse. And yet those are the exact things
that, as we shall see, a revered religious text says about God: He
inflicts hardship upon us to build our character; He never imposes more
hardship on a person than the latter can bear.

But that child is our son — Aditya, our life. Adit is
thirty-five now. He cannot walk or stand. He can see only from the left
side of his eyes. He cannot use his right arm or hand. He speaks
syllable by syllable. Yet he laughs — you can hear his laughter three
houses away. He enjoys going out to restaurants. He loves the songs of
Talat Mahmood, Mohammed Rafi and Kishore Kumar. There are some songs,
though, the moment they commence, we have to rush and turn off the tape —
he is so moved by them that he starts sobbing. There are others which
he identifies with himself:Tu aake mujhe pehchaan zaraa Main dil hoon ik
armaan bharaa . . .. . .Muskaan lutaataa chal Tu deep jalaataa chal
Khud bhi sambhal Auron ko bhi raah dikhlaa...

‘Mere baare mein,’ he declares with joy — and laughs even
more as in our rendering the last line has been altered to ‘Papa ko bhi
raah dikhlaa...’

He loves these singers and their songs. He loves even more
the tapes that his grandparents made for him, and the tapes that his
uncles and cousins make for him now. He doesn’t watch television —
moving images bother him. But he does listen to the news over the radio.
The newspaper is read to him — among the things he calls himself is the
‘ghar kaa samvaad-daataa’. He loves poems being read to him. Seeing
Adit’s spirit, and how many of his poems Adit knew by heart, Ashok
Chakradhar has gifted him many of his books, and even dedicated one to
him. Every time you read the books, you have to begin at the very first
page, not just the title page, but the very first, blank page — for on
them Ashok Chakradhar has written many an endearment —‘Pyaare, ati
pyaare Aditya ke liye . . .’ And if, while reading the poems, you
pronounce even a syllable wrong, he hoots with joy, ‘Galti’. That was
one of my father’s favourite games with Adit. He would deliberately make
a little mistake, and Adit would catch him out — hoot, and laugh,
beaming with triumph... He loves everyone. Everyone in the family loves
him. His maternal grandmother, Malti Shukla, was his life. He is ours.

And that God just does not stop pounding this helpless, defenceless child...

ADIT COMES

...A premature child. Barely four pounds. In distress.
Placed in an incubator. As they could not locate a vein in his tiny
arms, the doctors had stuck needles through his scalp... A horrible
sight for us... His sugar level is not stabilising, some nurse came and
said to us. ‘Will you please sign these forms for a blood
transfusion?’...

Three days went by. A Pakistani lady doctor used to visit
Anita to check up on her. I am not supposed to tell you, she said, and I
will lose my job if they come to know I have told you, but something
has happened. Insufficient supply of oxygen in the incubator...

Anita came back to our home in Alexandria. Adit stayed on in the incubator. For an entire month. A horrible month.

‘The child will finish your life as you have known it, may
finish your life altogether,’ a senior at the World Bank said to me one
day. He was a cheerful, warm-hearted person, but was speaking from
first-hand knowledge as he had been bringing up a mentally handicapped
son. ‘The doctors may well tell you, “We can do little more for the
child.” And ask you, “Are you desperate that he lives?” When they do so,
don’t let your emotions come in the way. Do you know what you will have
to go on doing for the boy — not just now or for a few years but as
long as the child lives?...’

That evening I reported the conversation to Anita and my
mother-in-law. A person of iron-will, my mother-in-law said, ‘That is
just not the case. Handicapped children live perfectly useful lives
these days...’

Three months later we were advised to take the child to
the head of paediatric neurology at the Georgetown University Hospital
[in Washington]. We were exhausted, felled. The doctor was a kind,
elderly gentleman. ‘I am going to use a word that you would have heard —
it is used a lot these days to raise money. The word is cerebral palsy.
It only means that the baby’s brain has suffered injury...’

We were too stunned to ask what exactly this was going to
mean for our Adit’s future. I told the doctor, ‘We had planned to return
to India. But if you feel that, for the sake of the child, we should
stay on in Washington, of course we will. I will take back my
resignation from the World Bank.’

‘I have not been to your country, young man,’ that kind
doctor said. ‘If you are here, all that we will be able to do will be to
tell you how your son is faring against the milestones. But as
observant parents you will notice that yourselves...’

‘I have not been to your country, as I said,’ he
continued. ‘But from what I have heard, you have strong, well-knit
families there. That is what this child will need as he grows up — a net
of love and security. So, if I were you, I would stick to your
decision, return to your country, and bring him up in the embrace of
your family.’

Among the wisest bits of advice we ever received.

We returned to India. We stayed with our parents. Soon,
Anita’s mother came to stay with us...Adit became the centre of many
lives.

THE SCHOOL

Adit was growing up. Shanti-amma, his maid, would sing to
him, tell him stories, take him to the park. She was ever so possessive
of him — always ticking off anyone who expressed the slightest doubt
about Adit’s condition, or who uttered a word of pity or condescension.
My mother-in-law would teach him — from news, to stories, to rhyming
games, to poems, to arithmetic. ‘But why arithmetic, Mummy?’ I would
remonstrate. ‘Why make him do sums? Why make him learn tables? He is
never going to use them.’ ‘But just see his sense of achievement when he
gets the answer right,’ she would teach me. ‘And he learns fast. He has
excellent memory.’

….One day, as Anita was driving Adit and herself to
school, a jeep coming in the opposite direction lost control. It rammed
into Anita’s little Fiat. She and Adit were tossed inside the car. They
were shaken, of course, but neither seemed to be badly hurt.

Soon after the accident, however, Anita began to feel
peculiar sensations on her left side. We thought the problem was a
‘frozen shoulder’. But soon, the stiffness and pain developed into
tremors... One doctor after another... Eventually she was diagnosed as
having developed Parkinson’s disease. She was just about forty-two at
the time — another one of those ‘one in ten million’ blows.

By now the tremors have spread to the right side also.
Every time Anita does something with her hands — for instance, when she
eats — her legs flail uncontrollably. That is dyskinesia, another one of
those words with which our circumstances have enlarged our vocabulary.
The symptoms became worse every winter. This winter — of 2009, in which I
begin working on this book about Adit and her — Anita has fallen four
times...

With my parents having passed away, with Maltiji also
having gone, I am now the servant-in-chief, not just of Adit but of the
two of them. The help of many friends and relatives sees us through the
day. But more than anything, Anita’s strength and equanimity keep us
afloat. ‘I had another toss today,’

I heard her tell her sister the other day, describing a
fall so bad that we were lucky she had not fractured her skull. And so
helpless and shocked was she that, while there was an alarm bell next to
where she lay, she could not reach out to it. She now wears another
alarm on her wrist... Even though this is her own condition, she manages
the entire household; she husbands our savings; she runs everything so
that every need of Adit is met — at once; and so that I am absolutely
free to do my work.

‘We have to be thankful for an ordinary, boring, eventless day,’ Anita taught me long ago.

Her fortitude is a daily, ever-present example of another
one of the lessons she taught me once: ‘You have to remember, there are
many types of courage.’

My father’s courage as he evacuated Hindus in July-August
1947 out of Lahore — where he was City Magistrate at the time. The
courage with which he settled, comforted and on occasion quelled the
raging refugees in camps across Punjab. My mother’s courage as she
comforted her mother and father when they lost a young son, as husbands
deserted two of their daughters. My mother-in-law’s courage as she went
on looking after all of us even as rheumatoid arthritis twisted and
turned and crippled her hands and feet.

Malini’s courage, Veena’s courage evident in the dignity
and fortitude with which they have borne blows of unimaginable severity,
faced life, brought up their children single-handed, and, on top of it,
continued working... Here we are: we get so puffed up just because we
have stood up to some authority-of-the-moment. And here are these girls:
they have stood up to life itself.

‘But I will never get over what God has done to Adit,’
Anita says. How true:Ghaayal ki gati ghaayal jaane Jauhar ki gati
jauhar...

Another scam . . . Inquiry into
disinvestment of VSNL” — the papers proclaim. The announcement has been
preceded by stories along similar lines in two magazines, a planned
build-up to the announcement.

The government does seem to have surrendered its
judgment to a bully. And it will be sorry for it. But I will come to
that in a moment. The charge is that as the minister of disinvestment in
the NDA government, as part of disinvesting government equity in VSNL
in 2002, I “gifted” 774 acres of prime land in four cities to the Tatas.

The facts are the exact opposite.

During due diligence of VSNL, it was discovered that the
company had been buying land over the years. Technology had changed. It
was now possible to provide the same services with infrastructure spread
over significantly less land. VSNL, working with advisors, identified
774 acres of land as “surplus”, in the sense that it would not be needed
in the future to provide the services for which VSNL had been
constituted

Accordingly, in the agreements
governing disinvestment, it was provided that whoever won the bid for
the company would not get this land. The company was valued by excluding
this land. Indeed, the article in the agreement was framed in such
extreme terms that at one stage the potential bidders said that they
would not go through with the bids at all. The officer who was handling
the disinvestment — one of the strongest officers I had the good fortune
to work with, P.K. Basu (now agriculture secretary) — told them to go
home, and forget the disinvestment. The article would not be diluted one
bit, he told them, disinvestment or no disinvestment.

Eventually, they came round and the disinvestment went
through. It was one of the most hotly contested cases. On the one side
was Reliance — Dhirubhai Ambani was still alive, and was calling the
shots. On the other side were the Tatas. The Tatas won, by a whisker.
That outcome firmly established the credibility of the disinvestment
process. “Even Dhirubhai Ambani could not find out what was going on in
your ministry,” observers told us.

The article that Basu and his colleagues incorporated is
worth reading. It is a short one. It could have been accessed by anyone
from half a dozen sources — but by now it is no surprise that sections
of the media will deliberately not read!

Please read the article, and then I will set out its implications. Here it is:

4.7 LAND

(a) (i) The strategic partner confirms that it shall cause
and procure the company to hive off or demerge the land into the
resulting company pursuant to a scheme of arrangement in terms of the
provisions of Section 391 to 394 of the act.

(ii) The strategic partner confirms its understanding that
it will transfer all such shares in the resulting company to the
government as it may acquire as a consequence of this transaction, that
is a minimum of 25 per cent of the resulting company’s issued equity
shares or a higher number which shall include shares in the resulting
company that it may further acquire as a consequence of any further sale
of the equity shares in the company by the government to the strategic
partner, prior to the demerger, as part consideration of transfer of the
transaction shares and any subsequent sale of the company’s shares by
the government to the strategic partner, pursuant to this transaction.

(b) The strategic partner confirms that:

(i) it shall do and cause to be done all and any such
acts, matters, deeds and things as are necessary, usual or expedient
including voting in favour of the item of business relating to the
approval of the scheme of arrangement to implement the hiving off or
demerging of the land into the resulting company;

(ii) it shall not directly or indirectly do or cause to be
done any acts, matters, deeds or things which may adversely affect or
delay the hiving off or demerging of the land into the resulting
company.

(c) (i) If for any reason the company cannot hive off or
demerge the land into the resulting company then, subject to Article 5.6
(b) (iv) and (xiv) hereto at any time when the company sells or
transfers the land or agrees to sell or transfer or otherwise develop
the land, the strategic partner shall pay to the government within seven
days of the sale or transfer of the land an amount equivalent of 25 per
cent of the benefit accruing to the company pursuant to such sale or
transfer or otherwise development of the land, as determined by the
appraiser, after taking into account any impact under the Income Tax
Act, 1961.

(ii) Subsequent to this agreement and the share purchase
agreement, if the government sells more than 25 per cent of its equity
shareholding in the company to the strategic partner, then the
percentage of amount to be paid to the government by the strategic
partner on account of sale or transfer or otherwise development of the
land under Article 4.7(c)(i) shall increase in proportion to the
percentage of such further sale of equity shareholding in the company by
the government to the strategic partner. For the purpose of this
article the term “transfer” shall include sale, lease, licence, grant of
development rights or the parting of physical possession of the land or
transfer of any interest, whatsoever, in the land.

The article provides, first of all, that whoever wins the
bid — and there could have been no plan to pass on a favour to the
Tatas, etc, for no one knew who would win the keenly contested bidding
process — shall not get the surplus land. The excess land would be
detached from VSNL. A new company would be formed, and the land would be
transferred to it.

Second, that the shareholding of this new company would be
what the shareholding of VSNL was before disinvestment. That is, the
bidder who won would have no share in it at all. The government would
have the proportion that it had before disinvestment — about 52 per
cent. Employees would have the proportion they had. The rest — about 47
per cent — would be with the general public that held shares of VSNL,
the company was listed in both India and the USA. In a word, a
government company would be set up. And this government company would
acquire the land.

Third, in case such a company could not be formed and the
disinvested VSNL decided to part with the land, it would be able to do
so only if the government agreed to the proposal. The reason for this
was that, even after disinvestment, the government would continue to
hold 26 per cent of VSNL’s equity. The sale of land, or disposal of any
rights in an asset such as land, can only be done by a special
resolution of the board and that resolution cannot go through unless the
party that holds 26 per cent of its equity agrees.

Fourth, if that new company could not be formed for some
reason, and if the government approved the proposal of VSNL to sell the
land, the entire proceeds would be distributed in accordance with the
pattern of shareholding that prevailed before disinvestment — that is,
the winner would get absolutely nothing; the proceeds would be divided
between government, employees and the general public in the proportions
in which they held the shares before disinvestment.

There was a fifth factor which was especially important,
as it caused the greatest heartburn among potential bidders. This is
contained in clause (c) (ii) reproduced above. This clause provided that
if government shed more than 25 per cent of the equity it was holding
of VSNL, then the share of the proceeds that the disinvested VSNL and
the winning bidder would have to pay to government out of any sale or
transfer of land or rights in it would increase proportionately.

Sixth, the hands of the prospective bidders were tied
tighter by incorporating a very comprehensive definition of “transfer”.
The article had used the term “transfer” of land, etc. In the last
sentence, it was provided that “for the purpose of this article the term
“transfer” shall include sale, lease, licence, grant of development
rights or the parting of physical possession of the land or transfer of
any interest, whatsoever, in the land.” All proceeds from any form of
transfer would go to the government and the original shareholders and
not a penny would go to the successful bidder.

Finally, a series of interlocking clauses tied the
prospective winner in perpetuity! Privatisation agreements have “call”
and “put” options. That is, after a specified period — say, three years —
the winner can “call” on the government to sell its residual shares.
Similarly, the government has the right to “put” its shares for sale.
But in the VSNL agreement, we provided that even if the government
parted with all its shares through either option, it would always retain
one share — known as “the golden share”; and that by virtue of this
single share, all the rights it had in regard to the surplus land would
remain with the government!

In other words, the agreement provided that neither the
surplus 774 acres nor any right in them whatsoever shall go the bidder
who succeeded in winning the contest. So, where does the minister get
this notion, parroted by some magazines, that 774 acres were gifted to
the Tatas?

“But why was the land not just taken out of VSNL before
disinvestment?” the innocent ask. VSNL was a listed company — it was
listed both in India and the US. If such a substantial asset was taken
away, any shareholder could have gone to court and halted the whole
process on the charge that his interests had been harmed. On the other
hand, if it was not taken away, the government would be accused of
making “priceless” land over to whoever succeeded in winning the bid.
Hence a solution was devised: the land would be taken out of VSNL, but
the interests of pre-disinvestment shareholders would not be impaired.
The land would be turned over to a new company in which the shareholding
pattern would be what it was before the disinvestment of VSNL. That was
an excellent solution that Basu and his colleagues devised, and it has
stood the test of time. The winner did not get the land. The
shareholders did not go to court!

“But didn’t VSNL have enormous amounts of cash? Wasn’t
this just handed over to the Tatas?” Yes, VSNL had a cash reserve. The
fact is that this cash was drawn down before the company was
disinvested. The government had VSNL declare a special dividend of 750
per cent! As a result, the winning bid along with this dividend secured
for government a P/E ratio of 11 as against the measly 6 at which VSNL
shares were trading before disinvestment.

When no other tack is left, critics are led to ask, “But
why has the new company not been set up even though nine years have
passed since VSNL was disinvested?” The fact is that the government and
the winners — the Tatas in this case — tried to work out a solution. The
attempts couldn’t get past disagreements. For instance, the Tatas said
that as the land did not belong to them, and as it was to be transferred
to a company that would in essence be a government company, the
government should pay the stamp duty that would be incurred in such
transfer. Similarly, as the monopoly of VSNL in regard to international
calls had been curtailed by two years, a compensation package was
announced by the government. They felt that this was inadequate. As the
issues could not be resolved, they proposed that the matter be referred
for arbitration. I had no problem with that proposal, but my colleagues
in the ministry correctly counselled that as the proposal had revenue
implications, we should send it to the finance ministry. That is what
was done.

The government changed. Since then, I see from what has
appeared in public that the Tatas kept writing to the government
requesting the latter to settle the matter. They wrote that there were
three alternatives, and that any one of the three would be acceptable to
them. The government — the UPA government, that is — kept saying that
it was examining the issues and would get back to them. It did not.

Kapil Sibal says this delay has been very costly to the
people of India, and that is why he has ordered an inquiry. I say —
“Bravo! Excellent!” He should institute an inquiry into the conduct of
ministers whose negligence has cost the country so much.

The ministers? P. Chidambaram and Pranab Mukherjee, the
finance ministers of the UPA governments! For, remember, the department
of disinvestment has been under the finance ministry since the UPA
formed its government in 2004. Maybe they are the real targets of this
buccaneer? No?

Why else would Kapil this time round entrust the inquiry
not just to a handpicked judge but to a handpicked officer working
directly under him?! As for me, far from being my inquisitor, Sibal is
my publicity agent! He keeps me in the news. And gratis!

The writer was Union minister for telecom and for disinvestment in the NDA government

I have been reminded of Gianiji’s prescience in the last
few months. For the last year, I have been living far away from Delhi,
immersed in religious scriptures for a book that I have completed.
Telecom has been as far from my concerns as any other gutter in Delhi.
It is the spate of lies which has been let loose that has compelled me
to return to it.

The falsehoods have been spread to
divert attention from what are the two central issues. Who made the
money? What were the heads and controllers of the Government doing when
this loot was going on? Hence, ‘NDA’, ‘first come first served’, 2003,
1998... And, given the fact that media, etc. do not read documents,
given that few would today remember what the condition of the sector was
at that time, the Government has all but succeeded: ‘there has been no
loss’; ‘in any case, it was only Raja who was doing something wrong, and
we have already removed him’; ‘in any case, he was just following NDA
policies’ ...

As fabrications have been put out, I will set out the
facts that relate to the time that I was in charge of the Communications
Ministry — from early 2003 to April 2004.

The sector at that time

When I was put in-charge of the Ministry, the sector was marred by the following features:

[A] The sector had all but collapsed after the excessive
bids; the decision to shift to a Revenue Sharing Model had rescued it
from collapse; but the sector was yet in a very precarious condition.

[B] Today, there is a rush for licenses; at that time few
were coming forward to enter the sector or to extend the coverage of the
services that they were providing. This is evident from the following
table:

Hence, one of the principal objectives of Government was to steer the sector on to a growth path.

[C] Such services as were being provided were concentrated
in the relatively well-to-do parts of the country. This had led to a
lot of acrimony in the ill-served areas and to criticism in and out of
Parliament — namely, that telephony was being converted into a service
for the elite and the rich living in just some favoured parts of the
country. It had also reinforced deep resentment in areas such as the
Northeast and J&K — in these areas the lack of service was taken as
further proof that the Centre did not care for them and was actively
discriminating against them. In fact, apart from BSNL, no Operator had
come forth to provide services in the J&K circle. In some circles
(like Assam, Bihar, North East, Orissa, MP), there was only one licensee
or the second Operator had taken the license but was providing next to
no service. There was not much growth even in Kolkata. Circles like
Bihar, Haryana, Rajasthan, Punjab, UP (East), were also suffering from
slow growth.

One of the principal concerns of Government, therefore, was to extend communications services to these under-served areas.

It is in this context that the figure that is being touted
about — that 28 licenses were given by the NDA in 2003-04 — should be
seen: not one of these 28 licenses was for lucrative circles or metros.
The distribution of the licenses was as follows:

[D] The sector was paralysed by litigation: the CDMA
Operators and the GSM Operators were at each others’ throats. Almost
nothing could be done and it would be challenged by one side or the
other in TDSAT, the High Courts and the Supreme Court. The Operators
would file cases not just against each other but also against the
Government. Indeed, even the expectation that Government was considering
a course of action would trigger one side or its rival to rush to the
courts and obtain a stay. Two examples will suffice. A Group headed by
the then Minister of External Affairs and Electronics, Mr. Jaswant
Singh, had been constituted in the late 1990s to make recommendations
for a New Telecom Policy. It had to get a special study done on
‘Possible Litigation Scenarios’. The exhaustive paper was considered by
the entire Group in its sixth meeting held on 22 March 1999. Similarly,
no sooner had the Cabinet decided to integrate the Limited Mobility and
Full Mobility services, the GSM Operators had moved the Supreme Court to
stay any order that the Government may issue in this regard.

A major concern of the Government, therefore, was to lift
the sector out of this quagmire of litigation. Telecom service providers
should compete for the goodwill of the customers rather than trying to
block each other in courts, or by suborning ministers and civil servants
in Delhi — that was the objective.

[E] One of the reasons for this litigious and paralyzing
situation was the complexity of the licensing system at the time. The
plethora of licenses had grown as a coral reef over the decades. They
differed by the date on which they had been obtained; the type of
service the Operator provided; the location at which the service was
provided; the distance over which the service was provided; the
technology that was being used to provide the service; the type of
customer to whom the service was being provided . . . This had two
consequences: (1) It triggered litigation; (2) Every decision was seen
by one side or the other as discriminating against it. [In a lecture
that I delivered at the time, and which the Indian Express published, I
described the situation in regard to the licensing system as I found it.
The text can be easily accessed today as it is reprinted in my book, Governance, The sclerosis that has set in, ASA, Rupa, 2004, pp. 69-92.]

On the other hand, it was becoming clear by the day that
the licensing system was being rendered obsolete by the advance of
technology. This was specifically noted in the 1999 Telecom Policy. In
its Paragraph 1.3, the Policy had stated, inter alia,

‘In addition to some of the objectives of NTP 1994 not
being fulfilled, there have also been far reaching developments in the
recent past in the telecom, IT, consumer electronics and media
industries world-wide. Convergence of both markets and technologies is a
reality that is forcing realignment of the industry. AT one level,
telephone and broadcasting industries are entering each other’s markets,
while at another level, technology is blurring the difference between
different conduit systems such as wireline and wireless. As in the case
of most countries, separate licenses have been issued in our country for
basic, cellular, ISP, satellite and cable TV operators each with
separate industry structure, terms of entry and varying requirement to
create infrastructure. However, this convergence now allows operators to
use their facilities to deliver some services reserved for other
operators, necessitating a relook into the existing policy framework.
The new telecom policy framework is also required the facilitate India’s
vision of becoming an IT superpower and develop a world class telecom
infrastructure in the country.’

This is why the Government set up the Group on Telecom and
I.T. Convergence in 2001. The way that technological advance was
cutting the rationale of the licensing system, and also the way that the
licensing system, in turn, was holding back the adoption of newer
technologies and thereby harming the interests of consumers and the
country were the major themes of the TRAI report of October 2003. These
were also among the principal reasons on account of which TRAI
recommended that Government should replace the plethora of licenses with
a Unified License.

Three further facts should be borne in mind.

[F] First, in those days, spectrum was given as a part of
the license: the licensee got the license, and the Government in turn
undertook to allow him use of a start-up quantum of spectrum to provide
the services for which he had got the license. Subsequent tranches of
spectrum were to be released when the subscriber base crossed certain
specified limits.

[G] Second, while we had been able to establish the
bidding route firmly in Disinvestment, and for which reason I was keen
to introduce it in the Telecom sector also, the experience with bidding
in the latter had not been altogether a happy one:

* When the sector had been first opened up and private
Operators had been invited to bid, they had filed grossly excessive bids
as a result of which the sector had all but collapsed, and had to be
rescued by abandoning altogether the obligations that ensued as a result
of the bids.

* The fourth Cellular Licenses were given as a result of
multi-stage bidding process in 2001. By 2003, the teledensity had not
changed much since the bids in 2001.

* As several areas of the country had not been taken up by
any Operator when the bids were invited for the 4th Cellular Operator,
in March 2003 bids were again invited for these areas. But it became
evident that not a single bid was going to be received. At considerable
discomfiture, the Government had to call off the entire exercise.

[H] Terrorism had become a major problem. Grave
apprehensions had developed among intelligence agencies that the spread
of mobile telephony will enable terrorists to carry out their plots even
more readily.

Government’s strategy

In view of these circumstances, the Government’s strategy became:

* Accelerate growth;

* In particular, in the under-served areas;

* But at the same time, meet the concerns of the intelligence agencies;

* Once telephony grows, spectrum will become a scarce resource; for this purpose

* Take measures that will make more spectrum available for civilian use;

– Devise a fair and transparent modus for distributing spectrum for the time it would have become scarce;

– The modus adopted should also ensure optimal usage of the spectrum;

* Pull the sector out of the mire of litigation and
allegations. Operators should compete in the market not in courts and
government offices.

* The licensing system should be simplified. In
particular, it must be service and technology neutral, and it should
spur the adoption of the best and latest technologies that would benefit
the consumer.

Means for implementing the strategy

We decided to use a series of instruments to achieve these objectives:

* Unleash and enable BSNL/MTNL to provide intense
competition to private Operators: in particular, (i) to spur them to
extend coverage to under-served areas; (ii) to offer new services; (iii)
to lower the exorbitant tariffs they were charging;

* Lower the Revenue Share being taken by Government;

* Unify licenses, eventually instituting a single unified license:

– To ensure competition, this should be given quasi-automatically: TRAI came to use the expression ‘automatic authorization’;

– Keep the entry fee at a minimum;

* Anticipate the situation when spectrum will become scarce. Hence,

– Commence work that is required for eventually delinking licenses from spectrum, and auctioning the latter;

– Allocate Rs. 1400 crore to Defence Forces — this was
their estimate of what they needed — so that they may modernize their
signaling equipment, and thus free excess spectrum for civilian use;

– Devise incentives for optimal use of the spectrum and
penalties for its inefficient use: existing inefficient use of what
would become a scarce resource if the growth that it was projecting
would materialize, was ‘of utmost concern’ TRAI observed, and hence it
emphatically recommended that these incentives and penalties be devised.
[See, for instance, Para 7.30 and Annexure IV of its Report of October
2003. These reports are all available on the website of TRAI.]

* Ensure that every thing is done so openly and with such manifest fairness that litigation ceases.

It is a matter of great pride that these steps indeed more than fulfilled the objectives that Government had sought to pursue:

a) From a situation of near collapse, the sector set on to
a course of massive growth: this has made a major contribution to
growth — could the IT sector have become what it is today without the
growth that we have recorded in the telecom sector?; it has generated
large employment; it has helped integrate the country further;

e) From being a rich man’s toy, the mobile has become an
adjunct of everyman’s daily life. It has enabled the poorer craftsmen to
improve their businesses. It has enabled migrant labour to keep in
touch with their families. In a word, it has been a boon to the poor as
much as to anyone else.

f) At that time, Operators used to charge Rs. 28 to 32 per
call — both the caller and the person called had to pay. Today, our
rates are the lowest in the world.

g) At that time, our teledensity was far below the world
average. Today, the Indian telecom network is the second largest network
in the world, and the fastest growing network in the entire world. In
2002, the mobile density was 1 per cent. Today it is 70 per cent. In
2002, the country was adding 2 lakh subscribers a month. Today, it adds
close to 20 million subscribers every month. This is one sector in which
targets set by Government have been exceeded manifold: the Plan target
for 2010 was exceeded by 300 to 400 per cent; rural connectivity targets
were exceeded by 400 to 500 per cent. This happened because of bold
decisions of Government, the growth-oriented approach of the Regulator,
the alacrity with which Indians adopt to new ways and things; most of
all, it happened because of the entrepreneurship of several Operators,
an entrepreneurship which the policy decisions of those days unleashed.
Contrast the way the country has always fallen woefully short of targets
in the power sector, a sector in which corresponding decisions have not
been taken and implemented.

h) At that time, the sector was mired in a host of legal
cases — with private Operators fighting each other, with all of them
challenging every decision of the Government; litigation was brought to
an end.

i) The Government used to spend an amount close to Rs.
20,000 crore every year for growth of telephone services in the country.
Now, the telecom sector is contributing to the Exchequer more than Rs.
50,000 crore every year by way of licence fees, spectrum charges,
service tax and other corporate taxes.

That this entire transformation is the result of policies
adopted during the NDA period is evident from the repeated affirmation
of the current Minister of Communications, and none other than the Prime
Minister that the UPA has just followed policies of the NDA Government!

How people are sought to be misled

‘It is Arun Shourie who introduced the
first-come-first-served principle. Raja merely followed it,’ Government
spokesmen have been declaiming again and again.

Typical of the devices that these people specialize in
deploying, it is a red-herring that has been thrown in the way to lead
everyone away from the central fact: Raja followed no principle, no
procedure, no policy. He certainly did not follow the
first-come-first-served procedure:

* There were 167 pending applications. Under
first-come-first-served norm, these are the ones that would have been
dealt with first. He just discarded this norm, and called for new
applications.

* On 24 September, 2007, he announced that the deadline
for receiving the applications would be 1 October, 2007. There was a
spurt of applications: 408 were received.

* Under Raja, the DoT announced that these would be considered on a first-come-first-served basis.

* Months later, he arbitrarily changed this to 25
September and thus eliminated a slew of competitors. This edict cut out
the applications from 575 [the 167 that were pending and the 408 new
ones that were received] to 232.

* Next, he changed the basis of adjudging the order in
which applications would be considered: the basis was to be the date and
time of receipt of application; he now ruled that it shall be the date
and time of fulfilling the conditions that were being specified in the
Letter of Intent. Among these conditions, as the CAG has pointed out,
was the condition that the applicants bring a banker’s draft of Rs. 1650
crore within 41 minutes. The favoured companies had prior knowledge
that this would be one of the conditions, and hence had come with the
drafts. Others were physically assaulted and prevented by musclemen from
accessing the office.

* As even these manipulations did not secure for Swan and
other favourites the quantum of spectrum which had been agreed upon,
Raja changed the priority list in circles like Punjab and Maharashtra.

Is this the way the first-come-first-served principle is
adhered to? Indeed, does this sequence betray that he and the UPA
Government were adhering to any principle at all?

The first-come-first-served principle has been in vogue
for long, certainly before the time when the Ministry was put in my
charge — in fact, I would be surprised if the Prime Minister with his
intimate acquaintance with the license-permit raj does not remember that
there was a time when such norms were used to allocate licenses for a
host of things: from railway rakes to imports. Here are just three
examples of documents in the telecom sector that refer to it:

* Guidelines for Issue of Licence for Basic Service
[No. 10-2/2000-BS-II, Ministry of Communications, Department of
Telecommunications , Licensing Cell (Basic Service Group), Sanchar
Bhavan, New Delhi, dated 25th January, 2001.] Clause 26 of this document
reads in part: ‘. For Wireless Access Systems in local area, not more
than 5+5 MHz in 824-844 MHz paired with 869-889 MHz band shall be
allocated to any Basic Service Operator including the existing ones on
first come first served basis. The same principle shall be followed for
allocation of frequency in 1880-1900 MHz band for Micro cellular
architect based system.’

The title of the next document itself is Procedure for
Allocation of Spectrum on First Come First Served Basis, [No:
10-2/2000-BS-II, Ministry of Communications, Department of
Telecommunications, Licensing Cell (Basic Service Group), Sanchar
Bhavan, New Delhi, dated 23rd March, 2001]. Apart from the title itself,
Para 1 of this document states, ‘As per Guidelines issued for Basic
Telephone Service providers, the spectrum for WLL service in the
frequency of 824-844 MHz paired with 869-889 MHz is to be allocated on first come first served basis.’

And, remember that, at that time licenses and spectrum
were joint-twins: so it is not that this principle was confined to
spectrum and had nothing to do with licenses.

Later that year, The Group on Telecom and IT Convergence submitted its 'Report on Limited Mobility'.
The Group was headed by the then Finance Minister, Mr. Yashwant Sinha,
It elucidated the meaning of the principle ‘first come first served’ in
regard to allocation of spectrum. Para 25 of this Report stated as
follows:

‘25. The Group noted that the description of
“first-come-first-served” used in the Guidelines of January 2001 was not
an accurate description of the content of policy as announced and as
implemented with reference to existing Fixed Service Operators. It does
give the impression that immediately on application the applicant would
become eligible for a spectrum license, whereas in fact the Guidelines —
especially when read with the spectrum allocation procedure of 23rd
March 2001, which stipulates the conditions under which the spectrum
would be allocated — clearly require that the Operator seeking spectrum
must have established a Point of Presence (POP) in an SDCA in order to
be eligible for the first tranche of spectrum; further installments of
spectrum being given subject to fulfillment of roll out obligations
which would include the obligation now mentioned in this advice, and to
ensure that the spectrum already given has been optimally utilized. The
23rd of March, 2001 Procedure also stipulates that in the event of roll
out obligations not being fulfilled the spectrum allocated would revert
back to the Government. Hence, “first-come-first-served” on a true
interpretation only means that allocation of spectrum is and must be
considered inextricably linked to performance. The Group noted that the
quantum of spectrum to be allocated to the fixed service providers for
WLL with limited mobility is in accordance with the recommendations of
TRAI.’

Each of these documents is from 2001 — two years before
I was given charge of the Ministry. In a word, ‘first come first
served’ was a well-established and recognized method of processing
applications.

Here is another example — this one from TRAI whose
recommendations everyone are always holding up as if we violated them.
In the Report, Recommendations on Unified Licensing, that TRAI submitted in October 2003, in Para 7.29, it stated, inter alia,
‘... The allotted spectrum varies from 4.4+4.4 MHz to 10+10 MHZ
depending upon the number of subscribers in each service area. Existing
BSOs [Basic Service Operators] shall be allocated 5+5 MHz in 824-844 MHz
paired with 869-889 MHz bands on a first come first served basis. The same principle shall be followed for allocation of frequency in the 1800-1900 MHz band.’

[E] In contrast to what happened during Raja’s time — when
the Finance Ministry repeatedly objected to what he was proposing to do
— during the time that the Ministry was under my charge, no objection
was ever raised by the Finance Ministry. In particular, the record on
file establishes that the Member (Finance) — who represents the Finance
Ministry on Telecom affairs — specifically approved the decision that
the first-come-first-served principle shall be observed. By contrast,
during the UPA tenure, the then Member (Finance) was so outraged by what
Raja was doing that she sought premature retirement and left Government
service all together.

And it was a perfectly reasonable principle. Two points
are noteworthy. As will be obvious, for instance from the extract given
above from the Group headed by Yashwant Sinha, it was never the sole
criterion: the applicant was to have fulfilled a number of other
requirements. Only after the competitors had fulfilled these criteria,
would the first-come-first-served criterion come into play. And these
requirements were known to all at the time they submitted the
applications. They were not injected ex post facto as in Raja’s
tenure. Second, it was a necessary and entirely open and fair criterion:
consider a situation in which two operators have fulfilled the
requirements — for instance, regarding establishing Points of Presence,
and getting the specified number of subscribers; but Government has at
that moment spectrum that is sufficient to meet the operational
requirements of just one of them. How would it choose between the two?
On the basis of which of them came to it with evidence of having
fulfilled the other criteria first. What could be fairer? What could be
more open?

Cabinet decision and what DoT did

One of the fabrications that has been put out is that
during the time the Ministry was in my charge, it exceeded what Cabinet
had authorized us to do. Forget my personal temperament, the fools who
put out such a lie should remember that that was not the Cabinet of
Manmohan Singh. It was the Cabinet of Atal Behari Vajpayee — the
slightest excess would land one out of the Government. And he had as his
Principal Secretary, Mr. Brajesh Mishra, one of the most powerful and
most effective Principal Secretaries that any Prime Minister of India
has had. He kept a hawk’s eye over whatever was happening in departments
of Government. It is beyond imagining that a decision of Cabinet would
be violated — and that too in such a contentious sector — and the
contenders — the private Operators who were always rushing to court —
would not raise Cain; that Mr. Mishra would not know; and that Mr
Vajpayee would condone the transgression.

The Cabinet decision is clear as can be. In its meeting on 31 October 2003, the Cabinet had decided as follows:

‘The recommendations of TRAI with regard to implementation
of the Unified Access Licensing Regime for basic and cellular services
be accepted.

‘DOT be authorized to finalise the details of
implementation with the approval of the Minister of Communications &
IT in this regard including the calculation of the entry fee depending
upon the date of payment based on the principles given by TRAI in its
recommendations.

‘The recommendations of TRAI in regard to the course of
action to be adopted subsequently in regard to the implementation of the
fully Unified Licensing-Authorization Regime be approved.

‘DoT be authorized to finalize the details of
implementation with the approval of the Minister of Communications and
IT on receipt of recommendations of TRAI in this behalf.’

The Cabinet decision clearly recognized that, as
recommended by TRAI and by the Group of Ministers, the process of
implementation would be in two phases. In the first phase, the Unified
Access Licensing Regime would be introduced: that is, the licenses that
had been differentiated by technology — CDMA vs. GSM — and range of
service — limited or full mobility — would be unified. In the second
phase, after recommendations of TRAI in regard to a fully Unified
Licensing Regime had been received and approved by Cabinet, that Regime
would be introduced. In both phases, the details of implementation of
the UASL regime and of the fully Unified Licensing Regime were to be
worked out by the Department of Telecommunications with the approval of
the Minister of Communications and IT.

2. The implementation action was taken in the background
of the following aspects of the TRAI recommendations which had also been
accepted by the Cabinet [Para numbers in the following refer to the
TRAI Report of October 2003, which can be readily accessed on its
website]:

(i) Within six months ‘Unified Licensing’ regime should be
initiated for all services covering all geographical areas using any
technology. (Para 7.1)

(ii) Unification of access services at circle level [a
‘circle’ roughly coincided with a state] should be taken up forthwith:
for this consultations with various stakeholders had already been
completed. This should be without delay followed up with steps to set
out the guidelines and rules for Fully Unified Licensing/Authorization
Regime by gathering details of international practices and through the
consultation process. (Para 7.6)

(iii) To determine the benchmark of the entry fee for the
UASL regime — that is, the interim period before the fully unified
licensing regime is ushered in — TRAI had considered the option of
inviting bids from existing as well as new prospective players. It had
concluded explicitly and emphatically that this option should not be
adopted. TRAI had advised that this option would be time consuming and
that it would delay the implementation of Unified Licensing. TRAI
recommended that instead the existing entry fee of the Fourth Cellular
Operator be accepted as the basis for fixing the entry fee for migration
to Unified Access Licensing regime for Basic and Cellular services at
the Circle level. (Paras 7.16 to 7.20) This was an eminently logical
proposition: the mobile density in 2003 was just about the same — a
miserable 1 per cent — as it was in 2001 when that price had discovered
through multistage auctioning.

(iv) TRAI had stated that it would give its
recommendations on efficient utilization of Spectrum, its pricing and
Spectrum allocation procedure in the near future. DoT was to issue
spectrum related guidelines based on the recommendations of TRAI after
receiving those recommendations. (Paras 7.28 & 7.29)

(v) TRAI had stated that it was not in favour of high
spectrum pricing since such a regime would make the services more
expensive and the desired growth would not take place in
telecommunications. (Para 7.33)

(vi) It had advised that the formulation of an appropriate
environment for growth, regulation and strategy had to be based on the
single priority of the moment, viz. increasing the availability of phone
connections at affordable costs and tariffs and ensuring a rapid roll
out of services. Growth of teledensity, it said, revolved around
developing access networks and making access to them available at low
cost. (Para 6.2)

(vii) To achieve 100 million wireless subscribers, TRAI
estimated that an investment of the order of Rs. 50.000 crores would be
required. It said that for investment of this order to come forth, the
prerequisite was that the sector be freed from litigation. (Para 6.5)

(viii) TRAI recommended that induction of new cellular
mobile operators should preferably be done under the ‘Unified Licensing
Regime’ which it expected to come into being soon after it finalized its
recommendations on the matter. (Para 7.37)

(ix) Yet two paragraphs later, TRAI recommended that, if
adequate spectrum was available, then in the existing Licensing Regime,
Government may introduce additional players through a multi-stage
bidding process as was followed for the Fourth Cellular Operator. (Para
7.39)

The words ‘existing regime’ referred to the
pre-UASL regime — for that was the regime that was existing at the time
that the Report was submitted in October 2003.

3. Thus, as will be evident from both — the
recommendations of TRAI and the decision of the Cabinet — the UASL
regime was a transitional phase. It was to be the first step towards
putting in place a fully Unified License Regime.

4. During this transitional phase, the DoT was to proceed
with its usual duties using the price paid by the Fourth Cellular
Operator as the benchmark.

5. The Cabinet never intended that the Department should
halt all expansion of services and, to take one instance, leave the
under-served and unserved areas of the country in a state of neglect.
Nor did the Cabinet, to take another instance, put any bar on giving
Basic Service licenses. What happened as a consequence of its decision
was that an addendum was added — nothing was subtracted from the NTP of
1999 — and two additional categories were introduced: henceforth, the
DoT could issue licenses not just for Basic Services, NLD, ILD, etc. It
could in addition issue UASL and Unified Licenses.

6. Subsequent events showed the wisdom of this decision —
for, in the event, TRAI took not six months but one and a half years to
finalize its recommendations regarding a fully Unified Licensing Regime:
by that time the NDA Government had long gone. And in the Report that
TRAI eventually gave in 2005, there was no recommendation for
multi-stage bidding at all. Had the Cabinet directed the DoT to stop all
further steps for extending services, the sector would have been per
force frozen for over a year and a half — and that on the basis of an
imagined recommendation that TRAI itself did not reiterate in its
subsequent Report on the matter.

7. No sooner had the Cabinet decided to introduce
unification of licenses, the Cellular Operators filed an application in
the Supreme Court seeking a stay on the implementation of UASL regime.
This application became part of the Appeal that had been filed earlier
by the Cellular Operators against the TDSAT order of August 2003 in the
Limited Mobility Case. Implementation of the Cabinet decision therefore
required careful handling of the litigation before the Supreme Court.
DoT accordingly proceeded with the following objectives in mind: (a)
ensure that the decision of the Cabinet regarding the UASL Regime is not
stayed as a result of the petition of the Cellular Operators; and (b)
implement the UASL Regime in so transparent and fair a manner that the
sector indeed becomes litigation-free. Through the Law Ministry, the
services of the then Solicitor General were availed of by the DoT for
handling this matter.

8. Implementation of the Cabinet decision then proceeded as follows:

(i) Since there were pending applications for Basic
Service Licenses, these were dealt with in accordance with the usual
procedure. Tata Teleservices had applied for providing Basic Service in
four service areas in early September 2003. Letters of Intent were
issued against these applications in the normal course for Basic
Services on 7 November 2003.

(ii) On legal advice, including that of the Solicitor
General, in the Guidelines for issue of UASL’s resulting from migration,
it was provided that all new applications for Access Services would be
in the UASL Category. The rationale for this was manifest: issuing of
Service based licenses, as was the practice till then, would have
perpetuated the very aberrations which were sought to be corrected by
the UASL Regime that the Cabinet had directed the DoT to implement.
These Guidelines were issued on 11/11/2003. This meant that henceforth
neither applications for Basic Services nor from new cellular mobile
Operators would be entertained. The new operators for access services
could only be of the UASL category. Going in for bidding for the new
UASL’s would have required determination of slots for auction in each
service area in the CDMA technology and separately for those involving
GSM technology. The bidding process would have been time consuming.
Government also had before it the fate of the bidding process that it
had initiated as recently as March 2003 when bids had been invited for
the vacant slots for the Fourth Cellular Operator, based on GSM
technology, no bids had been received and the process had to be
cancelled at the last moment. The main reason for this lack of response
was evident to Government: the Telecom Sector had got entangled in
litigation and, except for the existing lot of Service Providers, new
entrants were not forthcoming.

(iii) There was another very important aspect which could
not be ignored. Had all further permissions been stopped, and Reliance
had proceeded to migrate on the basis of the Cabinet decision of
31/10/2003, Government would have been opened to the charge that it had
favoured Reliance by blocking its competitors. Apart from being
manifestly unfair, such an outcome would have definitely resulted in the
Courts staying the UASL Regime.

(iv) Para 7.39 of the TRAI Report regarding multi-stage
bidding process related to the introduction of additional cellular
operators under the pre-UASL regime. If it had been intended for new
UASL operators, it would have been worded differently and the words
‘existing regime’ would not have been used. Thus there was no violation
of the Cabinet decision in this regard.

It is in this background that clarification was sought
from TRAI by the then Secretary DoT about how pending applications,
applications from existing Operators who may opt to migrate, and new
applications for UASL’s were to be dealt with. Chairman TRAI and the
Regulatory Authority as a whole put the position beyond doubt.

The entry fee recommendation which was benchmarked to that
paid by the Fourth Cellular Operator and which had been adopted for the
purpose of migration in November itself, had to be used for others also
— otherwise the latter would at once get a ground for charging the
Government with tilting the playing field in favour of one or some
Operators. This was a very important consideration. Even the majority of
TDSAT in its judgment delivered as recently as August 2003 had held
that, while the introduction of limited mobility had been legal, it had
upset the level playing field. Tata-Teleservices were the major
competitor of Reliance, and the Cellular Operators, namely Bharti and
Hutch, who had applied for new UASL’s. Neither set would, and with
eminent justification, have reconciled to anything which would have put
them at a disadvantage vis-a-vis Reliance. On this basis, in
accordance with the recommendations of TRAI, a procedure was adopted for
dealing with applications for new UASL’s, and the new applications,
which were few in any case and which were from Operators with great
experience in the sector. TRAI had made it clear that this procedure was
to be followed for an interim phase, till Guidelines for spectrum were
finalized in the future.

That TRAI recommendations covered applications from both
existing limited mobility Operators who were migrating as well as new
applications is evident from the repeated references in the
communications of TRAI to both categories. Similalrly, consider the last
exchange on this subject — about the application for West Bengal and
Andaman and Nicobar Islands: this was to be a new license. TRAI
reiterated its recommendation.

And the communications were from the Authority as a whole.
By no stretch of imagination can they be dubbed as private letters from
the Chairman in his individual capacity. This is evident from the
Agenda item dated the 17th November 2003 for the meeting of TRAI. It is
evident from the communication of the Secretary and Principal Advisor of
TRAI dated 19 November 2003. And it is evident from the communication
of TRAI dated 5 December 2003 in regard to West Bengal and Andaman and
Nicobar Islands. I have just not been able to fathom how responsible
persons — who have had access to these communications — have suppressed
them from public knowledge and made out that the Chairman of TRAI and
the Secretary of Telecom Department entered into some surreptitious,
private conspiracy to grant licenses to TATAs or Bharti or someone else.

The procedure adopted and the decisions taken were so
manifestly fair and transparent that there was no controversy or
allegation by anyone of any discrimination. No one challenged the
approach or decisions in any Court. There was no criticism in the media.

All this in a sector that had been marred by acrimonious allegations and litigation.

And who got the licenses and for which areas? Some Swan? Some real estate racketeer?

The licenses

The procedure adopted for grant of new UASL’s was simple
and straightforward. The entry fee payable was based on the same
principles as were followed for migrating from Basic Services to a UASL.
In November itself, Reliance migrated in 18 Service Areas;
Tata-Teleservices in 6 areas; Bharti, HFCL and Shyam in one area each.

Tata-Teleservcies surrendered the Letters of Intent for
Basic Service Licenses that had been issued to them on 7/11/2003. They
applied for UASL’s for providing services in Haryana, Kerala, Punjab,
and UP (West).

Tata-Teleservices applied for UASLs in 8 service areas on
12/11/2003. These were Bihar, Orissa, Rajasthan, Madhya Pradesh,
Himachal Pradesh, Kolkatta and UP (East). These were all underserved and
unpopular areas with very low tele-density.

Bharti applied for UASLs 6 service area — namely Bihar,
Orissa, Rajasthan, UP(East), West Bengal including Andaman and Nicobar
Islands, and J&K. Once again, all these were underserved and
unpopular areas with very low tele-density. Out of these service areas:

* In the Jammu & Kashmir circle, apart from BSNL no other Operator had ventured forth to provide services.

* While, Bihar, Orissa & West Bengal circles were offered during 2001 auction, no bidder had expressed any interest.

* In March 2003, DoT had again tried to auction these
service areas. As it became evident that there would be close to nil
response from possible Operators, the auction process was abandoned at
the last moment.

* A glance at the teledensity in the circles for which
licenses were given will show how the situation that prevailed then
compares to 2010:

As noted above, it is a matter of pride that the decisions
of Government were implemented with such fairness and transparency, and
the migration and other licences were given with such fairness and
transparency that not a single objection was raised by any party — and
this in a sector in which every step of Government had hitherto been
challenged and denounced by one side or the other. When they saw the
fairness and openness with which Cabinet decisions were being
implemented and licences being granted, the petitioners who had filed a
petition in the Supreme Court to stay the implementation of the UASL
licensing regime withdrew the petition.

There are several other fabrications that the spokesmen of
this Government have put out to deflect people from the issues at hand:
who got the money? What were the seniors doing when this loot was going
on? But they are at par with the fabrications that I have listed above.

In addition to attending to the routine tasks that had to
be implemented during the interim period, as directed by the Cabinet, we
began exchanging views about elements of the Unified Licensing regime.
Should the bids be single-shot bids — as was the case in disinvestment?
Or should the bidding be multi-stage — as had been the case, for
instance, in selecting the Fourth Cellular Operator? Should the bidding
process be conducted by the DoT — a Department that had itself been
dragged into much litigation, and was the object of strident allegations
— or should they be conducted by an independent agency? How should
incentives be built into the bidding process to induce optimal use of
the spectrum, and penalties for hoarding or inefficient use? What should
be the stance of Government if, once again, the competitors overbid and
then cannot sustain their operations at the high prices they have paid?
Should they be rescued as had to be done when the sector was first
opened up? Or had the sector become mature enough by now so that firms
that overbid should be allowed to go under?

These were the sorts of questions on which we had begun work in the wake of the six-month framework suggested by TRAI.

The Government changed.

No one could have imagined that the advance towards the
Unified Licensing regime would be halted. And that what had been the
procedures to be followed for the interim period of six months would be
made permanent. And that without any authorization from the Cabinet.

That is one reason on account of which the current
problems have arisen. Another one is that in UPA-I lines were slipped
into the Guidelines without recommendations of the Regulator, without
any reference to Cabinet. In UPA-II, the terms of reference of the Group
of Ministers were altered without reason or authority. On matters on
which the Government is bound by law to seek TRAI’s recommendations,
TRAI was specifically told that it had no business to seek to advise
Government . . . But the main reason, as stated above, is that in Raja’s
case, he followed no procedure, he followed no policy, he adhered to no
norm at all. And, even though his misdeeds were known publicly, he was
allowed to continue to make a business of his office. In what way does
this represent a continuation of anything done during the Government led
by Mr. Vajpayee?

A veteran of many battles against the authority, Shourie, discusses
philosophy, politics and policies in a freewheeling conversation with Mahesh Sarma, editor, Careers360. Excerpts:You studied at Modern school. Then St Stephen's College. So it wasn't a struggle, right?I
have been very fortunate, meaning I have not had to struggle with
poverty so to say. I am the son of a very honest civil servant, a very
creative one. But I struggled against authority, which would mean
governments, dominant intellectual fashions etc. For instance, when
everybody was a socialist, I felt that those controls, and the License
Quota Raj is going to cost us a generation and everybody condemned what I
wrote at that time.

To ascribe a certain elitism just because someone is educated in good institutions -- is it right?Of course not, in fact much of the change is brought about by very small elites. The great masses of India [ Images
] can't produce metal alloys that are needed for rocketry, for
missiles, for the Arjun tank. So, we must respect elitism when it is
based on merit and competence. Now, mediocrity has become the norm.
Intimidation has become argument, and assault has become proof. Because I
can assault you therefore I am right.
So, I am much for elitism, which is based on opportunity or
everybody, positive help for everybody. And, based entirely on
performance and merit. The current, reducing elitism to be a prerogative
word has come entirely from this Leftist discourse. Which is, under the
guise of equality, you pull down the standards. And anyone who has
achieved something, you say, damn fool, elitist.Somewhere you said that your career has had various happy accidents. What were these accidents?Being
born to my parents, complete accident. Meeting my wife (our aunts knew
each other), complete accident. I was called for a tea party at my
wife's aunt's place and she was such a dazzlingly beautiful girl that I
couldn't take my eyes off her. Similarly meeting Mr Ramnath Goenka, who
had been putting up a great fight during the emergency was also a
complete accident.How did you get the Express editor's job?Emergency
passed, I got to know Ramnath Goenka through many episodes. And the
Janta Party had come to power and we were staying in Mr Goenka's house
in Bangalore. He asked what I was doing and I said, "What do you mean
what am I doing? I can't find a job, I am writing a book. He said,
'Stupid, who is going to read your book? No one is going to read it. You
are not finding a job, I can't find any young man, you come. I'll tell
the editor to give you some big title.' That is my letter of
appointment.So all goods things that happened, happened by accident?No,
being dismissed is also an accident. By 1982, Mrs Gandhi put so much
pressure on him to dismiss me. My good friend, Tavleen came one day and
asked what I am planning to do now. And I said, 'I don't know'. She
said, 'I'll speak to that person, who runs a syndication service so you
start writing and he will syndicate it.' There's a very good friend
called Lokesh Sharma who was then running that syndication service. So,
that led to columns, led to books.After reading your book I think you wouldn't mind private entrepreneurs coming into education.Firstly,
they will come only if there is profit involved. But, they will not be
able to build an institute, an institution of excellence, if they keep
interfering and running it as a business. A good model is American
institutions; they are all set up by millionaires. Somebody gives a
million dollars, someone donates acres of land. But, after that he
doesn't interfere, he has that self-restraint to leave it to
professionals, each of whom has been selected on the only criteria of
their extreme dedication to education.Exceptions like IISc, TISS, TIFR do exisit but they were all pre-independence institutions.That
is a good point, they have been sustained in that spirit. My regret is
that a larger number of Indian industrialists who have done well and set
up institutes of excellence in their own industries have not done the
same thing in education. I am quite hopeful that the new breed of
entrepreneurs are self-made men, who did not have much money to begin
with but are now billionaires.
If they are enabled to come into the field of education, they will
bring the same spirit into education; that is my plea. If we don't do
that, the field will be open to racketeers, they will definitely come in
and fill up the vacuum. That is the scene as of now, which happens in
every society.What according to you would be an appropriate policy framework?The
greater freedom to persons of worth to set up educational institutions,
is one. But, at the same time strong rating agencies which are not in
the hands of anybody, they are free spirits. True rating agencies,
regulations but ratings that will put pressure for excellence. Some of
those will be corrupted, no doubt.
Racketeers will suborn those who are doing the rating. But, some will
arise among them saying 'No, our future depends, even our business
future depends on being a credible rating.' Second thing that will
improve standards is surfeit of supply. Today, racketeers are
prospering, because there is a shortage. That is how regulaters get
corrupt.If you were part of Ministry of HRD, what would be your first move on the regulatory regime?To
clean up the regulators, because that is the most accessible thing that
a Minister can first do, UGC, AICTE and all. The main thing would be to
encourage a large number of publications and freelancers to monitor
their contributions. That would go a long way. Third, to do everything
possible to turn our education system to the future. It's not looking
far enough, in terms of the syllabi, that's very important.
Probably use technology to get over the shortage of good teachers.
That's very possible today and that would be a quick way to multiply
quality in India. We can use institutions which are known for excellence
to do their corporate social responsibility by becoming places to
upgrade teacher quality in their regions.Is Mr Sibal going in the right direction?I greatly welcome Kapil Sibal's [ Images
] initiatives. For instance, this move that he has made against deemed
universities, it is a wonderful move. But probably it should have been
accompanied by much more exposure of the intrinsic worth or
worthlessness of some of these institutions. Then, the public opinion
would have been created much better. But the objective is a very good
one.Photograph: Jitender Gupta/Outlook Group